NUMBER OF AUDITS PERFORMED IN 2014
China • India • Vietnam • Israel
Textile • Electrical goods • Construction • Wood • DIY • Sanitary • Decoration • Gardening
The working conditions of around 50000 workers were covered in our audits, on sites of varying sizes up to 5000 workers. 95% of the audits were carried out in China.
The ratings achieved by the factories were as follows between 2013 and 2014 :
· 0% A (2013: 0%)
· 30% B (2013: 20%)
· 43% C (2013: 50%)
· 27% D (2013: 30%)
Thus it can be observed that the overall conformity of our supplier base improved.
The percentage of alert notifications remained extremely high with 50% of factories meeting serious non-conformities but this is a great improvement compared to 2013 where 61% of factories were concerned.
The position of factories concerning the social conformity issue is varied and changes in the market ( increased $ value increasing price of goods, low oil costs offset by higher labour costs, increasing domestic demand, increasing product legislation in Europe ) are not favourable to improving the social situation. Formalised procedures to ensuring improvements remain rare, mainly through lack of experience and know-how in most cases.
Health and safety issues was the major chapter of concern. The issue of fire regulations, whether in terms of certification or more practical issues concerning alarms, signalling, access to exits etc was a major source of non-conformity. Non-conformity concerning building licences was also regularly observed.
2014 was also a year in which the complexity of social insurance for workers came to the fore and saw difficulties in establishing what exactly the local law requires. A highly complex subject which needs to be addressed by the ICS for 2015/6.
CORRECTIVE ACTIONS CARRIED OUT
2014 was a dynamic year involving:
- The signature of a new contract between Adeo and all our direct suppliers in China, reinforcing our stance on the social issue and including the social code of conduct created and validated in 2013.
- The review of the social audit process with our Chinese office to follow up the training programmes implemented in previous years.
- A training session with our Vietnamese purchasing office to explain the social audit process.
- The suspension of commercial activities with several suppliers, notably concerning electrical items in China, was enacted and brought fruitful results with suppliers rapidly addressing the non-conformities found.
- A closer collaboration and more formalised feedback between our purchasing managers and the overseas offices to improve the level of conformity.
AUDIT SCHEDULE AND OUTLOOK FOR 2015
The number of audits in 2015 will increase dramatically to between 200-250 audits with the ultimate objective of auditing all OEM suppliers by the end of 2016. This increased volume will no doubt result in an internal reorganisation to address our social audit programme in a more thorough and systematic manner.
In a bid to cover all our OEM suppliers, there will no doubt be more diversity in the regions covered ( Indonesia, Turkey etc ) and the semi-announced system of audits experimented with in 2014 will be used for all our audits in 2015. Our new contract, including our social code of conduct, will also be signed by all direct suppliers to Adeo in 2015.
Adeo will continue to explore different avenues to improve the results of the audits : joint initiatives with other companies concerning consistently non-conform factories, the experimentation of different processes to help factories achieve conformity ex. monitoring, the redrafting of social questions in our pre-audit qualification document used when visiting suppliers for the first time, the construction of training programmes more adapted to establish the responsibilities of our overseas staff with regards to the suppliers on this issue…
Adeo will remain committed to achieving conformity for all our factories in order to satisfy the growing customer expectations on this subject and will take all the measures necessary to attain this goal.